Medicare Part D-IRMAA Explained

If you’re Medicare-eligible and considering your supplement options, don’t forget to enroll in a Prescription Drug Plan, also known as a Medicare Part D Plan.

With a Medicare Part D Plan, you will be charged an additional monthly fee which varies based on which particular drug plan you enroll in.  Keep in mind that Medicare Supplement and Part D plans are in addition to Medicare Part A and Medicare Part B.

How much does a Medicare Part D Plan cost?

For the majority of people, you will pay your Medicare Part D premium only. It’s important to know that if you have a Medicare Supplement Plan you should take a Medicare Part D Plan with it when you first become eligible.  If you do not enroll in a Medicare Part D Plan, you may face late enrollment penalty fees.

What about a Medicare Part D-IRMAA?

If you’re an individual with a gross income above a certain amount, you may have to pay a Part D income-related monthly adjustment amount, or a Part D-IRMAA. Part-D IRMAA is calculated by your reported gross income from your IRS tax return from two years ago. For those making above a certain amount, you will have to pay the Part D-IRMAA amount in addition to your monthly Part D Plan premium. The Part D-IRMAA is paid directly to Medicare, since it is run by the government.

If you are responsible for a Part D-IRMAA, Social Security will contact you directly and let you know the exact amount you have to pay based on your income. The Part D-IRMAA amount you are responsible for paying can change year after year. If at any point you feel you are paying too much for your Part D-IRMAA (i.e., your income level decreases), you can always contact Social Security for an appeal.

Most people get the Part D-IRMAA amount taken from their Social Security check directly. It is not part of your plan premium and is completely separate. If you do not get the Part D-IRMAA amount taken from your Social Security check, you will receive a bill directly from Medicare or the Railroad Retirement Board.  Failure to pay the bill will result in the loss of your Medicare Part D coverage.

Can the Part D premium be automatically deducted?

If you would like your Part D premium deducted directly from your monthly Social Security payment, you need to contact your drug plan and not Social Security. Typically it takes three months to start the deduction, so don’t be alarmed when your first deduction is for three months.  After the third month, only one premium will be deducted each month.

Questions about Medicare Supplement or Prescription Drug plans?  Contact a Caravus Individual Market consultant for more information.